• Audere Research

Commodities Monthly Roundup ~ September 3rd

August was characterised by a number of hugely negative headlines including global concerns regarding the spread of the Delta variant of Covid-19 and its associated economic ramifications, the shambolic US withdrawal from Afghanistan, as well as a major hurricane battering parts of the USA. Relief came from an unlikely source – Jerome Powell, the Fed Chair, who softened the markets taper fears by stating that stimulus efforts will be wound back, but slowly. Commodities ended the month largely in the red with Gold eking out a small gain.


Energy


OPEC+ has raised its 2022 oil demand forecast although some market participants feel that this is overly optimistic and believe OPEC+ will be left with a supply surplus for next year. Both oil producers and consumers seem comfortable with Brent at the $70 per barrel level. The benchmark ended the month down 4.38%.


China is reported to be hoarding crude again with signs that imports could swing back this month as its economy reopens. Analysts report that Chinese crude importers are ramping up purchases and paying higher premiums to secure supplies from November onwards.


Asia’s 3rd largest economy India is seen as a key driver for energy over the next 20 years and its petrol demand is set to reach a record high this year as more people take to the roads for both business and leisure. Annual passenger vehicle sales rose by 45% in July.


In the US, crude inventories fell more strongly than expected in spite of a rise in domestic production to a 15-month high. This should prove price supportive in the trading sessions ahead provided non-farm payrolls don’t disappoint.





Metals


Aluminium bucked the commodity trend for August, ending up 4.29% and prices rose to near a decade high at the start of September as China’s deepening output cuts raised fears of a supply shortfall. The metal’s prices have risen by almost 40% this year and 53% over the past 52 weeks.


Copper ended in the red with a small drop of 1.97% for the month, driven by a slowdown of Chinese factory activity. Chinese states reserve administration also released 150,000 tonnes of copper, aluminium and zinc into the market in efforts to cool metals prices. Lead, tin and zinc all ended the month lower.



Precious Metals


Gold was slightly up on the month benefitting from a weakening dollar. The US jobs report on 3 September will provide investors with more insight into the Fed’s timing for tapering. Other precious metals will be equally guided by the jobs report and platinum liquidity remains poor. Both palladium and platinum ended the month down with the former faring the worst and well off its 52-week high.





News Links


OPEC and its allies are adding more oil back to the market as demand recovers from the worst of the coronavirus pandemic https://www.independent.co.uk/news/opec-germany-russia-frankfurt-aaa-b1912642.html


Crude oil prices are in a ‘holding pattern’ for now, says Vanda Insights https://www.cnbc.com/video/2021/09/02/crude-oil-prices-are-in-a-holding-pattern-for-now-analyst-says.html


Oil Steadies; OPEC+ Sticks to Gradual Output Hikes https://www.fxempire.com/news/article/oil-steadies-opec-sticks-to-gradual-output-hikes-771931


WTI Oil Jumps Above $70 On Bullish U.S. Demand Data https://oilprice.com/Energy/Oil-Prices/WTI-Oil-Jumps-Above-70-On-Bullish-US-Demand-Data.html


Base metals prices on the London Metal Exchange and Shanghai Futures Exchange were mixed on the morning of Friday September 3, but overall the picture is one of consolidation ahead of today's employment report from the United States. https://www.fastmarkets.com/article/4006077/morning-view-base-metals-prices-mixed-but-overall-in-consolidation-mode-ahead-of-us-jobs-report


Copper price prediction: focus on dollar, China’s industrial output data https://invezz.com/news/2021/08/29/copper-price-prediction-focus-dollar-chinas-industrial-output-data/


Afghanistan's mighty copper reserves remain out of reach, even for China https://www.fastmarkets.com/article/4004437/afghanistans-mighty-copper-reserves-remain-out-of-reach-even-for-china


Aluminum prices soar as supply worries mount https://www.taipeitimes.com/News/biz/archives/2021/09/01/2003763564


Aluminium Prices Hit 10-Year High As China Looks To Cut Emissionshttps://oilprice.com/Latest-Energy-News/World-News/Aluminum-Prices-Hit-10-Year-High-As-China-Looks-To-Cut-Emissions.html


Gold, silver and platinum await Friday's Jobs number https://www.kitco.com/commentaries/2021-09-02/Gold-silver-and-platinum-await-Friday-s-Jobs-Number.html


Gold Price Preview: August 30 - September 3 https://goldprice.org/news/gold-price-preview-august-30-september-3

Palladium Price Analysis: XPD/USD remains depressed below $2,400

https://www.fxstreet.com/news/palladium-price-analysis-xpd-usd-remains-depressed-below-2-400-202108270524


Silver price seems ripe for its next target at $24.50 https://invezz.com/news/2021/08/31/silver-price-ripe-next-target-24-50/



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